Dependency theory

Julio Huato juliohuato at
Wed May 23 14:54:22 MDT 2001

I'd like to comment critically on Louis Proyect's piece on "dependency
theory."  I confess I have not read many of the authors mentioned by Louis.
But, the more I read Louis, the more I think the crux of the problem here is
methodological and not historical (including the history of ideas), as Louis
seems to believe.

If the interested readers don't want to read Marx's Capital and Grundrisse
directly, they could benefit a lot by reading the introduction and first
chapters of Evgueni Preobrazhensky's New Economics.  That would be, IMHO,
much better than going through the long list of authors and books suggested
by Louis.  I mean, if time is a constraint.  Although Preobrazhensky's work
deals with another type of transitional social formation, Soviet Russia in
the 1920's, the methodological approach is classical Marxism at its best --
studying it is extremely helpful in dealing with the social formations of
21st century Latin America.

Abstract thinking is indispensable.  Marx's main theoretical effort was
aimed to study the 'laws of motion' of the capitalist MODE OF PRODUCTION.
If we are to understand anything about concrete, historical capitalist
formations, it is indispensable that we examine these laws of motion apart
from the contingent historical forms in which they exist.  It's not a matter
of turning abstract theory into an autonomous, Platonic world of concepts.
It's a matter of understanding the causal logic that drives actual
historical capitalism.  Simply put, not every aspect of historical
capitalism occupies the same causal rank.  If it did, history would be

If Marx had not been careful enough to distinguish between logic and history
in his inquiry, I don't think he would have been able to illuminate the
phenomenology of capitalism the way he did.  Transforming the world requires
understanding it.  In his endorsement of "dependency theory," Louis
conflates the 'laws of motion' of the capitalist mode of production with the
historical peculiarities of this mode of production, as it is articulated
with others, in a given geographical region, with a peculiar set of
political institutions, etc., i.e. Latin America.  That doesn't help.

Capitalist structures always break path in conflict with other production
relations.  Therefore, capitalist structures run into trouble as they need
to fight other structures.  On top of that, the dynamics of the capitalist
structure itself (i.e., the capitalist reproduction) is self-contradictory.
Even if we ignore the influences of other production relations (as we must
in some stage of our study), by itself, the chemically 'pure' capitalist
reproduction tends to run into trouble.  It is key to disentangle between
the two types of trouble.

And that is not all.  Underlying the capitalist structure, there is a
peculiar geography and a concrete demography that refract the process of
capitalist reproduction in definite ways.  And overlaying it, there are
political 'super-structures', which have an influence on the course of the
capitalist reproduction.  There are different states with different
political configurations, laws, currencies, social attitudes, ideologies,
etc.  These are all additional influences (and sources of trouble) on the
course of the capitalist reproduction for which we need a separate
accounting.  In summary, when we look at particular social formations (say,
Latin America), it is our task to distinguish between the different sources
of trouble for capitalist expansion and not lump them all together.

Only after we have disentangled the different influences (at least the main
ones) and assessed their causal status in the historical process, we're
ready to synthesize them orderly into a coherent narrative.  The design of
strategy and political program is based on this.  Now, it is obvious that
the actual historical process is a complex, diverse, yet unique, flow of
events where everything interplays with everything else -- many damn things
after others.  Precisely, because of this complexity, we need to make these
abstract distinctions.  And while no better abstract distinctions are
provided to deal with the topic than those Marx supplied, then we should use

IMO, the issue is not whether Latin American economies 'depend' upon the
economies of rich capitalist countries.  In fact, the world capitalist
market is a network of interdependences.  No individual capital is
independent, as it needs to interact and compete with others.  Say that we
group capitals by the national origin of the owners because we assume
national origin gives them some meaningful commonality of interests, then no
national group of capitals is independent, as it needs to interact and
compete with others.

And, of course, since -- as Marx said -- money and capital are 'social
powers', larger capitals (and groups thereof) wield larger powers.  Provided
the expected profits surpass the expected costs, any big, driven capitalist
(or group of them with common interests) will exercise her (their) big power
not only through the 'regular' competitive process but also via tricks,
politics, and war.  As far as capitals are concerned, the goal is
self-expansion and everything else is in the way.  Commodity production and
capitalist production have a drive to break barriers, even those of their
own making.  Legal and ethical barriers are constraints on capitalist
behavior and whenever capitalists believe they can get away with it, they
will try to infringe them.

Historical competition is not the chemically 'pure' type of capitalist
competition depicted in the abstract parts of Capital, vol. 3.  In fact, it
gets nasty.  But it is theoretically fruitful to imagine the limit case
where capitalists look so far ahead as to enforce their rules and keep it
legal.  That way, the only obstacles to capitalist reproduction under
consideration are those that are self-inflicted.  This kind of approach is
useful because it helps us predict the main thrust of history with more
certainty than lumping everything disorderly.

If regular competition can be asphyxiating for capitalists, nasty
competition on top of the regular one is even more so.  But just as
capitalists compete with one another, loyally or not, they also depend on
one another.  If capitalist A produces machines in the US and sells them to
Mexican capitalists, then there are at least two key considerations in A's
mind.  One, the growth of the market for her machines in Mexico.  And two,
the emergence in Mexico of capitalists B who may want to produce and sell
the same machines to Mexican buyers.  If the emergence of B is accompanied
by an expansion of the market for these machines such that both A in the US
and B in Mexico can grow fast, then the threat of the competition by B takes
completely different shades that if B is only a threat with no promise of
market expansion alongside.  With different competitive alternatives
envisioned, the strategies of A and B will be different.

If A thinks that the customer base in Mexico is small and the entry of B is
a pure threat, then she'll probably use all her social power to keep B from
entering the business.  Let's say that A abstains from going nasty and only
uses legal ways of competing and blocking the entry of capitalist B.  Still,
she may manage to keep B out of the industry for a while.  Now, if on top of
that, A uses her social power with no scruples (say, she resorts to
extra-economic force, state power, war, etc. -- in one word, imperialism),
then she may manage to keep B under for longer.  For how long?  It depends.

Now, the capitalist mode of production did not become dominant in the world
for nothing.  It is a virulent mode of production.  Depending on the nature
of the obstacles, this mode of production may take a while to assert itself,
but if and when it asserts itself, competition may not become cleaner but
capitalist A's maneuvers may become less effective in keeping capitalists B
from competing as the market-expansion considerations may move to the front

To summarize, the obstacles to the capitalist mode of production in Latin
America are not essential or absolute as the dependency theorists
postulated.  They are historically contingent.  It is not that the
capitalist mode of production in Latin America is of some peculiar brand,
'deformed', 'dependent', etc. such that it's doomed to remain small and shy.
  It's not either that monopolization has imposed on the capitalist mode of
production in the rich countries a one-sided mission such by which it is
forced to kill capitalists B at birth, as a matter of necessity, as if the
expansion of 'peripheral' capitalism were only a threat and did not open new
opportunities to rich capitalism.

It is, instead, for the most part that there are pre-capitalist structures,
political configurations, policies, laws or lack thereof, etc. hindering the
capitalist mode of production in Latin America.  And, if the condition of
productive forces in Latin America is such that the capitalist production
relations are most conducive to their further development than available
alternatives, then capitalist production relations might have a hard time
but they will end up imposing themselves.  This follows from Marx's view of

The ideas above do not imply, as Louis suggests, that full capitalist
development is required in all of Latin America before socialism can be
constructed in the region.  I don't know what Louis' definition of socialism
is, but I suggest that we stick to Marx's usage in the Critique of Gotha's
Program.  There socialism is a communist society in its earlier stage.
Although bourgeois rules are still applied to distribution of the flow of
consumption goods, commodity production has -- as a rule -- been dissolved
and replaced by planned production for needs by a democracy of direct
producers, and the political functions of the state have mostly been
absorbed by the civil society.

The basic premise to build this kind of socialism is obviously a highly
advanced, educated collective producer.  Whether, in Latin America, this
will take place via capitalism or not is not essential from the point of
view of the premises for socialism.  But, what is the alternative?  Louis
does not mention it but, in Marx's view, the chance of a country or region
to skip capitalism altogether depended on the success of socialism in the
rich capitalist countries.  It makes a lot of sense to me. But for the
workers in the rich countries to further the communist program, their
leaders must undergo radical adjustments in their view of the world,
including the getting rid of the notion of the 'weakest link' of the
imperialist chain.

But, is it possible that the premises be built in Latin America by means of
some sort of transitional 'socialism' characterized mainly by having a
revolutionary leadership inspired by Marxism in power?  After all, this is
what people usually call 'socialism', following Stalin's rush to legitimate
his rule with big words.  Well, the experience of the Soviet Union makes it
clear what the limits and conflicts of this path may be.  And there are
still living examples.  But the process of bureaucratization that Trotsky
aptly described in Revolution Betrayed is so advanced in some of these
'socialist' societies that I'm afraid it has eaten away even the pretension
of a workers' dictatorship.  I believe Cuba and Vietnam are still exceptions
that we must support wholeheartedly.  But I have no illusions about North
Korea and China.

Louis questions the idea of 'stages', but that is just to witness his
misunderstanding of the method.  Classification or periodization is a
preliminary but necessary step in theoretical work.  What Louis should do
instead of questioning the need of theorizing is propose his own
classification.  Assisted with much better historical information than Marx
and Engels ever had, can Louis (or we all) suggest an alternative approach
that avoids looking at a historical process as traversing stages?

IMO, Marx's view -- as he himself made it clear -- had nothing to do with a
mechanical teleology or with iron laws of history that condemn nations to
follow a certain predestined route.  However, Marx's
historical-materialistic theses are clear in the sense that the state of the
productive forces (mainly the condition of humans qua producers) imposes
hard historical constraints to the possibilities of human achievement.  This
does not imply that historical progress is uni-dimensional, as if it
consisted only of the evolution of the productive forces, as some critics
attribute to Marx.  But on this hinges what distinguishes Marx from
voluntarists and idealists who think that history can be shaped up by sheer
willpower, regardless of the existing conditions.  This is why I believe
Louis' torpedoes the wrong target.  The critique of the dependency theory
does not depend on a 4-stage theory of history.

As for the accusation of Euro-centrism against Marx and Engels, much of this
is muddled by the belief (even held by Gramsci) that the Bolshevik
revolution in Russia was a revolution 'against' the grand strategy implicit
in Marx's Capital.  I disagree with this view.  Now, I may not be qualified
to defend Marx and Engels tout regarding their attitudes towards the 'Third
World', but I reject the idea that Marx and Engels' fundamental theory of
capitalism and their main views of history are invalidated by some sort of
racism permeating their mindsets.  Even if it were proven (which has not
been) through proper biographical investigation that Marx and Engels were
racist or practiced racism in some meaningful sense, that would bring a lot
of shame on them but would barely affect their fundamental theses.

Louis links the critique of the dependency theory (and, by implication, the
theoretical vindication of Marx's theory of history) to racism.  He implies
this by referring to the American Indians, as they were considered savages
by social scientists influential on Marx and Engels' thought (Locke, Smith,
Morgan, etc.).  Even if we ignore the etymologic and semantic evolution of
terms, this is entirely unwarranted.  Marx's view of history is a humanistic
one.  It is such that it clearly distinguishes between the fundamental
humanity and dignity of people everywhere and at every point in history, and
the social context in which they work and live.  This is nothing but an
application of the old distinction between 'nature' and 'convention'
introduced by the Greek Sophists, and it is the foundation of any social

Marx got a lot of mileage from this key distinction as it allowed him to
deny the status of natural or meta-historical to capitalist relations.
People who live under different social conditions have quite different
possibilities and opportunities.  This does not affectt their dignity as
human beings; it only shows that some social conditions may limit human
progress while others may assist it.  An illustration of this is the fact
that Mexican peasants who are not highly productive at home become highly
productive farm workers as soon as they cross the Mexico-US border and their
efforts are inserted in a different social context.  Basically the same
person inscribed in a different society displays different powers.

Louis rejects the attempt to resort to Marx and Engels' works in sorting out
the problem of Latin American capitalism, since -- according to him they are
'contradictory'.  Louis seems to believe that Marx's assessment of the
historical prospects in the 'Third World' evolved on his (Louis') direction.
  I doubt that.  But even if we don't get into the philological exercise, I
still think that Marxists have a responsibility to understand Latin American
capitalism (Irish capitalism, etc.) in the light of Marx's method and view
of history.  What we cannot do is to fall back to historicism without
previously refuting Marx's fundamental view of the world.

I have said that the critique of 'stagism' is not equivalent to a defense of
dependency theory.  But Louis goes on to show how 'stagism' became the
official communist perception of the Third World.  I think this is a very
distorted narrative of the evolution of Marxist views, but I don't want to
debate that now.  After Louis takes up the ECLA view, I find it harder to
follow his list of references.  The climax of his essay is the conclusion
that the critique of the dependency theory leads to becoming active
promoters of capitalism and betraying the working class in Latin America.
Non sequitur.
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